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Florida Attorney General Charlie Crist has sued Tenet Healthcare for improperly inflating charges for medical procedures to the detriment of Florida public hospitals. The suit, filed in the U.S. District Court for the Southern District of Florida, alleges that Tenet violated the federal and Florida Racketeer Influenced Corrupt Organizations (RICO) Acts by falsely inflating its charges to obtain reimbursements from a Medicare fund.

Public hospitals also depend on this fund, known as an Outlier Pool, to obtain reimbursement for expensive procedures that exceed Medicare's standard reimbursement rates. The Outlier Pool is a component of Medicare that derives its funds from a share of regular hospital reimbursements. According to the lawsuit, Tenet's scheme prevented public hospitals from obtaining millions of dollars in reimbursement they were otherwise due.

Medicare rules require that charges must be reasonably and consistently related to costs of providing the services. When Tenet artificially inflated its charges, its "costs" increased on paper, but not in fact. These manufactured increases in Medicare costs were used as the basis to improperly access the Outlier Pool, thereby depriving public hospitals of access to legitimate reimbursement.

"We are taking this action today because the deck has been stacked against the taxpayers in Florida and other states around the country," said Crist. "The evidence will show that Tenet gamed the system to enhance its profit margin at the expense of public hospitals. When public hospitals lose, both the taxpayers who support them, and the patients who depend on them, are victims."

In his lawsuit, the Attorney General seeks damages estimated to be in the millions of dollars, plus fees and costs. Once the amount of actual damages is determined, it could be enhanced up to triple damages under the RICO law.

Tenet is the nation's second-largest for-profit hospital chain in the United States, owning or operating 78 acute care facilities and 19,668 beds. Since 1994, Tenet has been the subject of numerous federal investigations, concerning an array of allegations including cost reporting fraud, upcoding, overbilling, duplicate billing, kickbacks, providing medically unnecessary services, misrepresenting services, falsifying medical records, billing for services not rendered, providing poor quality of care, and patient abuse.

In addition to the racketeering charges, Tenet is also charged with violating Florida's Deceptive and Unfair Trade Practices Act and unjust enrichment.

Referred from: (http://www.consumeraffairs.com)